Lessons Learned from a Failed Rent-to-Own Agreement
Are you considering a rent-to-own agreement? Stop and read this post to know the risks involved. This post will discuss things that go wrong with rent-to-own contracts. We will also provide some tips on how to avoid these problems. So, if you are considering entering into or have already signed one of these agreements, read this post first!
Below are two firsthand accounts of unsuccessful rent-to-own arrangements that our team has witnessed - a cautionary tale if you are considering signing one of these agreements.
TLDR: TAKE CAUTION when signing a rent-to-own agreement for a home.
Miguel and the Deceptive Company
Miguel was a hard-working man with the dream of owning his own home. He worked long hours to provide for his family and dreamed of one day having a place they could call their own, but it seemed out of reach due to his lack of credit.
One day while scrolling online, Miguel saw an ad encouraging people like him who wanted to buy a house without perfect credit. The ad said that this Rent-to-Own company could help them fulfill their dreams, and he was very excited. He was so excited that he immediately signed a contract with them without fully understanding all aspects of the contract, which was written in English – his second language.
The company reassured him that everything would be fine if he made a downpayment on the home and signed the contract. Miguel did so, feeling relieved and thrilled at finally taking steps towards achieving his life's goal for so long now – becoming a homeowner!
Unfortunately, after several years had passed since signing the contract with the Rent-to-Own company, they came back to him informing him that they were evicting him from the property – something Miguel didn't understand why, given how much money he'd already paid into it over time. The company took away not only Miguel's new home but also all of his money paid thus far towards its purchase - leaving him feeling crushed and confused about where things had gone wrong.
Lorena and the Facebook Ad
Lorena had dreamed of owning a home for as long as she could remember. She was the daughter of Mexican immigrants, and even though her parents taught her that anything is possible with hard work, it seemed like buying a home would always be out of reach. Lorena had no credit, and banks weren’t willing to lend her money without it.
One day while scrolling through Facebook, Lorena saw an ad about rent-to-own companies that could help her buy a house without needing to have perfect credit. This sounded too good to be true, but she was desperate, so she decided to take a chance. She contacted the company without consulting with anyone else or having the contract reviewed by a lawyer. She signed all the paperwork necessary for them to purchase a house on behalf of Lorena.
At first, everything seemed okay - payments were being made on time each month, and things were looking up for Lorena – until several years later, she received an eviction notice from the county saying they now owned the property! It turns out that when she had initially signed those papers with the rent-to-own company all those years ago, what they hadn't told her was that, in reality, what she had done was sign away ownership rights over this particular piece of property in exchange for monthly rental payments.
Lorena felt completely taken advantage of; not only did this mean losing her dream home forever, but all the money which went into making these rental payments every month since then had gone down the drain!
Do you feel like Lorena? Has a company enticed you to a rent-to-own agreement?
To make sure no other hardworking individuals experience such misfortune again in similar situations, we at Ed White Law are determined to take legal action against shady Rent-to-Own companies here in Oklahoma City. Their deceptive practices often lead to unfortunate outcomes similar to Lorena and Miguel. We are determined to help you with your financial losses and recover your money. If you feel like Lorena or Miguel, contact us at Ed White Law and ask for Travis today!
Frequently Asked Questions:
What is a Rent-to-Own / Lease with Purchase Option Home Agreement?
A rent-to-own home agreement seems attractive to people seeking to buy a home. A rent-to-own agreement is a unique method of purchasing a home where you can lease the property for an agreed-upon period with the option to purchase it before the expiration of your lease. These agreements have two distinct parts: a rental contract and an option to buy.
What is a Lease-Purchase Home Agreement?
A lease-purchase home agreement is an arrangement between the buyer and seller of a property where the buyer agrees to pay a predetermined amount for the purchase of the property over a set period. During this period, the buyer has exclusive rights to use and possess the property but only gains title to the home once all payments have been made. This agreement can benefit both parties if done correctly, as it allows buyers to purchase real estate without having to come up with large amounts of money upfront.
What is a Contract for Deed?
A contract for deed is an agreement between a buyer and seller that outlines the terms for purchasing real estate. Also known as a land installment agreement, this contract allows buyers to pay in installments instead of securing the total purchase price upfront. This type of contract gives buyers flexible payment schedules, often spread out over two years or more, similar to a mortgage. Buyers should read any contract for deed carefully as it includes essential information such as the sale amount, interest rate, and payment proceeds. The paperwork should also include clauses concerning late fees and how damages will be addressed if either party violates the agreement. A contract for deed can provide homeownership opportunities at more affordable rates than traditional mortgages or leases, making homeownership possible when other options are out of reach.
So who has the rights to what in these contracts?
This inquiry is challenging to answer since it is contingent on the details of each agreement, as well as its purpose and other factors.